Gestamp plans to expand its Volkswagen stamped parts supply operation in Chattanooga, adding 500 jobs.

This supplier will expand its existing factory near the VW assembly plant and build a new stamping factory on the VW site to to accommodate stamping of parts including external metals skin for the automaker’s new mid-size SUV. Gestamp will spend US$180m on the project that triples its capacity in Chattanooga.

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Currently Volkswagen uses press shops in several states to provide all the stamped metal parts for the Passat built at Chattanooga. This new expanded partnership will allow all of the external sheet metal stamping and a majority of the structural parts to occur at or near the vehicle plant, greatly reducing the cost of transport.

Gestamp Chattanooga will offer for the first time hot stamping technology, a process which allows the metal to become lighter, but harder, contributing to the reduction of greenhouse gas emissions while improving the occupant’s safety inside the car. The new hot stamping line will be Gestamp’s 13th in the US.

“Gestamp was an early believer in Chattanooga in 2009 and now we are taking a remarkable step forward with a macro-project that multiplies our size, adds Class A, introduces hot stamping technology and brings chassis for the first time into our North American operation,” said Francisco Riberas, president & CEO.

Volkswagen has agreed to give up 59 acres under its control in a land swap with the City of Chattanooga and Hamilton County governments to provide space adjacent to the factory for the new Gestamp factory. The city and county will provide Volkswagen with land of similar value.

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Volkswagen to expand production at Chattanooga